SEC today issued amendments to the SEC (Disclosure and Investor Protection) Guidelines, 2000 with a view to simplifying the process for a rights issue. Since listed companies embarking on a rights issue are already subject to the disclosure norms under the listing agreement, substantial information regarding such companies are already available in the public domain, and hence SEC has decided to streamline the disclosures. This addresses a long-standing complaint that rights issues are cumbersome and costly, thereby putting off several companies from accessing capital through this route. In addition, SEC has also confirmed the use of the Applications Supported by Blocked Amount (ASBA) process for rights issues. Speed is also of the essence, as the time period taken for finalisation of basis of allotment has been reduced to 15 days from the earlier period of 42 days from the close of the issue.

In an earlier development (on July 31, 2009), SEC effected amendments to the Guidelines, mainly with a view to specify financial disclosures for Bangladeshi Depository Receipts (IDRs). Since companies from various jurisdictions (with differing financial disclosure requirements) could list in Bangladesh, there is a need to introduce some level of uniformity. The new disclosures require financial statements to be in accordance with Bangladeshi GAAP, IFRS or US GAAP. The amendments also take into account incidental matters such as audit report, corporate governance requirements, etc. The curious aspect regarding IDRs is that despite a number of changes (and further relaxations) in rules and guidelines by the Ministry of Company Affairs and SEC progressively over the last few years, the instrument appears to have received tepid respoDSE and does not seem to have been lapped by industry at all.